SUBJECT:

Golden G. Higgwe, D.P. M. ,

Petitioner,

The Inspector General.

DECISION

Golden G. Higgwe, D.P.M. (Petitioner), is excluded from participation in Medicare, Medicaid, and all other federal health care programs pursuant to sections 1128(a)(1) and (3) of the Social Security Act (the Act) (42 U.S.C. § 1320a-7(a)(1) and (3)), effective October 20, 2003, based upon his conviction of criminal offenses related to fraud in connection with the delivery of a health care item or service, as discussed more fully hereafter. There is a proper basis for exclusion. Petitioner's exclusion for five years is mandatory pursuant to section 1128(c)(3)(B) of the Act (42 U.S.C. § 1320a-7(c)(3)(B)). Further, extension of the minimum period of exclusion by 20 years, for a total period of 25 years, is not unreasonable given the presence of three aggravating factors and no mitigating factors.

I. PROCEDURAL HISTORY

Petitioner was notified by the Inspector General (I.G.), by letter dated September 30, 2003, that he was being excluded from participation in Medicare, Medicaid, and all federal health care programs for a minimum period of 25 years pursuant to the Act, sections 1128(a)(1) and (3), due to his conviction in federal district court of criminal offenses related to the delivery of a health care item or service under the Medicare program and for fraud in connection with the delivery of health care items or services. The I.G. advised Petitioner that the minimum period of exclusion under the Act was five years, but that his period of exclusion was being extended to 25 years based on the presence of three aggravating factors. I.G. exhibit (I.G. Ex.) 1.

Petitioner requested a hearing by an administrative law judge (ALJ) by letter dated November 20, 2003. The case was assigned to me for hearing and decision on December 22, 2003. A prehearing conference was conducted by telephone on January 20, 2004, the substance of which is memorialized in my order of January 21, 2004. Petitioner did not agree to waive oral hearing and to resolution of this case upon the written record. The I.G. requested the opportunity to move for summary judgment. A briefing schedule was set. The I.G. was granted three extensions to file its motion and filed its motion for summary affirmance, ⁽¹⁾ supporting brief, and I.G. Exs. 1-5, on July 16, 2004. Petitioner's attorney withdrew on June 10, 2004, and Petitioner moved for appointment of counsel. Petitioner's motion for appointment of counsel was denied in my ruling dated July 26, 2004. Petitioner filed his response to the I.G.'s motion for summary judgment on August 11, 2004. The I.G. filed a reply on August 31, 2004.

Petitioner has not objected to my consideration of I.G. Exs. 1-5 and they are admitted.

II. FINDINGS OF FACT AND CONCLUSIONS OF LAW

A. FINDINGS OF FACT

The following findings of fact are based upon the uncontested and undisputed assertions of fact in the pleadings and the exhibits admitted. Citations to the I.G.'s exhibits may be found in the analysis section of this decision.

1. Petitioner was convicted by jury, contrary to his pleas of not guilty, on February 24, 2003, in the United States District Court for the Eastern District of Michigan, of two counts of mail fraud in violation of 18 U.S.C. § 1341 and two counts of health care fraud in violation of 18 U.S.C. § 1347.

2. Petitioner's mail fraud offenses, counts one and three of the grand jury indictment, occurred during the period March 1997 to May 2001, during which period he sent bills for services he did not perform to Medicare and to Blue Cross/Blue Shield of Michigan, causing those entities to send checks to him for payment through the U.S. mail.

3. Petitioner's health care fraud offenses, counts two and four of the grand jury indictment, occurred during the period March 1997 to May 2001 and involved Petitioner's defrauding Medicare and Blue Cross/Blue Shield of Michigan.

4. Petitioner was sentenced to 51 months of confinement followed by three years of supervised release, and to pay total restitution of $983,227.82 ($880,372.82 to Medicare and $102,855.00 to Blue Cross/Blue Shield of Michigan).

5. Petitioner was notified by the I.G. by letter dated September 30, 2003, that he was being excluded from participation in Medicare, Medicaid and all federal health care programs for a minimum period of 25 years pursuant to sections 1128(a)(1) and (3) of the Act, due to his conviction in federal district court of criminal offenses related to the delivery of a health care item or service under the Medicare program and for fraud in connection with the delivery of a health care item or service.

6. Petitioner filed his request for hearing on November 20, 2003.

B. CONCLUSIONS OF LAW

1. Petitioner's request for hearing was timely and I have jurisdiction.

2. Petitioner was convicted of a criminal offense related to the delivery of an item or service under Medicare.

3. Petitioner was convicted under federal law of felony criminal offenses that occurred after 1996, and that involved fraud in connection with the delivery of a health care item or service.

4. Petitioner's exclusion is mandated by sections 1128(a)(1) and (3) of the Act.

5. The mandatory minimum period of exclusion under section 1128(c)(3)(B) of the Act is five years.

6. A preponderance of the evidence establishes the aggravating factor recognized by 42 C.F.R. § 1001.102(b)(1).

7. A preponderance of the evidence establishes the aggravating factor recognized by 42 C.F.R. § 1001.102(b)(2).

8. A preponderance of the evidence establishes the aggravating factor recognized by 42 C.F.R. § 1001.102(b)(5).

9. No mitigating factors have been proven.

10. It is not unreasonable to extend Petitioner's period of exclusion by 20 years for a total period of exclusion of 25 years.

11. The period of exclusion begins to run on October 20, 2003, the twentieth day after the September 30, 2003 I.G. notice of exclusion. 42 C.F.R. § 1001.2002.

III. ANALYSIS

A. ISSUES

The Secretary of Health and Human Services (Secretary) has by regulation limited my scope of review to two issues:

1) Whether there is a basis for the imposition of the exclusion; and,

2) Whether the length of the exclusion is unreasonable.

42 C.F.R. § 1001.2007(a)(1). The standard of proof is a preponderance of the evidence and there may be no collateral attack of the conviction that is the basis for the exclusion. 42 C.F.R. § 1001.2007(c) and (d). Petitioner bears the burden of proof and persuasion on any affirmative defenses or mitigating factors and the I.G. bears the burden on all other issues. 42 C.F.R. § 1005.15(b) and (c).

B. LAW APPLICABLE

Petitioner's right to a hearing by an ALJ and judicial review of the final action of the Secretary is provided by section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)). Petitioner's request for a hearing was timely filed and I do have jurisdiction.

Pursuant to section 1128(a)(1) of the Act, the Secretary must exclude from participation in federal health care programs (as defined in section 1128B(f) of the Act and which includes the Medicare and Medicaid programs) any individual convicted of a criminal offense related to the delivery of an item or service under Medicare or State health care programs (as defined at section 1128(h) of the Act to include Medicaid). Pursuant to section 1128(a)(3) of the Act, the Secretary must exclude from participation in these federal health care programs any individual or entity that has been convicted of a felony offense of fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct, related to the delivery of a health care item or service or with respect to any act or omission in a health care program operated by or financed in whole or part by any governmental agency.

Section 1128(a)(3) of the Act is written in the disjunctive to cover two different categories of felonies relating to "fraud, theft embezzlement, breach of fiduciary responsibility, or other financial misconduct." Each category has its own distinct requirements for exclusion. The first category covers an individual convicted of one of the listed felonies "in connection with the delivery of a health care item or service" (42 C.F.R. § 1001.101(c)(1)), and it covers as a second category any individual convicted of a listed felony with respect to any act or omission in a health care program operated by or financed in whole or in part by any federal, state, or local government agency. 42 C.F.R. § 1001.101(c)(2); Thomas A. Oswald, R.Ph., DAB CR1216 (2004); see Erik D. DeSimone, R.Ph., DAB No. 1932 (2004). Petitioner's offense falls into the first category and consists of fraud in connection with the delivery of a health care item or service.

Section 1128(c)(3)(B) of the Act provides that an exclusion imposed under section 1128(a) of the Act shall be for a minimum period of five years. Pursuant to 42 C.F.R. § 1001.102(b), the period of exclusion may be extended based on the presence of specified aggravating factors. Only if the aggravating factors justify an exclusion of longer than five years may mitigating factors be considered as a basis for reducing the period of exclusion to no less than five years. 42 C.F.R. § 1001.102(c).

C. DISCUSSION

Petitioner's right to a hearing by an ALJ and judicial review of the final action of the Secretary is provided by section 1128(f) of the Act (42 U.S.C. § 1320a-7(f)). Pursuant to section 1128(f) of the Act, an individual or entity subject to exclusion is entitled to notice and hearing to the same extent as provided by section 205(b) of the Act. An oral hearing is contemplated. See section 205(b) of the Act; 42 C.F.R. §§ 1005.2(a), 1005.3(a), 1005.4(a) and (b), 1005.9, 1005.15, and 1005.16. However, an oral hearing is not required where the parties agree to submit the case for my decision on a stipulated record or where both parties waive appearance at an oral hearing and submit the case on documentary evidence and written argument. 42 C.F.R. § 1005.6(b)(4) and (5). Further, no hearing is necessary where all issues may be resolved on a motion for summary judgment as authorized by 42 C.F.R. § 1005.4(b)(12). Summary judgment is appropriate and no hearing is required where either: there are no disputed issues of material fact and the only questions that must be decided involve application of law to the undisputed facts; or, the moving party must prevail as a matter of law even if all disputed facts are resolved in favor of the party against whom the motion is made. A party opposing summary judgment must allege facts which, if true, would refute the facts relied upon by the moving party. The party opposing summary judgement must support its allegations of fact with affidavits or other evidence; mere allegations are not enough. See, e.g., Fed. R. Civ. P. 56(c); Crestview Parke Care Center, 373 F.3d 743 (6^th Cir. 2004); Garden City Medical Clinic, DAB No. 1763 (2001); Everett Rehabilitation and Medical Center, DAB No. 1628 (1997) (in-person hearing required where non-movant shows there are material facts in dispute that require testimony).

In this case, Petitioner did not agree to waive his right to an oral hearing for the taking of additional evidence. However, the I.G. requested an opportunity to file a motion for summary judgment, and has done so. In his response, Petitioner argues about the adequacy of his representation at his criminal trial and facts that underlie his conviction. Petitioner requests in his brief that my action be withheld until his appeal is complete and he is released from custody. Petitioner does not deny that he was convicted as alleged by the I.G., and he does not argue that there are mitigating factors recognized by 42 C.F.R. § 1001.102(c) for which I need to take evidence. Hence, I conclude that there are no material issues of fact in dispute and no oral hearing is necessary for the taking of additional evidence. Summary judgment is appropriate and I decide this case based on the evidence and briefs presently before me.

1. There is a basis for the I.G.'s exclusion of Petitioner.

Petitioner does not deny that he was convicted by jury, contrary to his pleas of not guilty, on February 24, 2003, in the United States District Court for the Eastern District of Michigan, of two counts of mail fraud in violation of 18 U.S.C. § 1341 and two counts of health care fraud in violation of 18 U.S.C. § 1347. I.G. Ex. 3. Petitioner's mail fraud offenses, counts one and three of the indictment, occurred during the period March 1997 to May 2001, during which period he sent bills for services he did not perform to Medicare and to Blue Cross/Blue Shield of Michigan, causing those entities to send checks to him for payment through the U.S. mail. The health care fraud offenses, counts two and four of the grand jury indictment, occurred during the period March 1997 to May 2001, and involved Petitioner's defrauding Medicare and Blue Cross/Blue Shield of Michigan. I.G. Ex. 2. Petitioner was sentenced to 51 months of confinement, followed by three years supervised release, and to pay total restitution of $983,227.82 ($880,372.82 to Medicare and $102,855.00 to Blue Cross/Blue Shield of Michigan). I.G. Ex. 3, at 2-6.

Although Petitioner does not deny that he was convicted, he does deny that he was guilty. In his response to the I.G.'s motion for summary judgment, Petitioner argues he should receive no more than the minimum five years of exclusion because his claims for services were not fraudulent and that his trial attorney was ineffective. The law is clear, however, that where the basis for an exclusion is the existence of a criminal conviction, whether or not the conviction is subject to or pending appeal, I may not review the basis for the conviction and Petitioner may not collaterally attack the conviction on either procedural or substantive grounds. 42 C.F.R. § 1001.2007(d).

Petitioner also urges that I delay action until his appeal of his criminal conviction is completed. However, the fact that Petitioner may have appealed his criminal conviction does not provide a basis for delaying the case before me. If Petitioner is ultimately successful in having his criminal conviction overturned or set aside, then he is subject to retroactive reinstatement pursuant to 42 C.F.R. § 1001.3005.

Based upon the facts before me, I conclude that Petitioner was convicted within the meaning of the Act of mail fraud and health care fraud, both of which involved the element of delivery of an item or service under Medicare or another health care program, here Blue Cross/Blue Shield of Michigan. Accordingly, Petitioner's exclusion is mandated by sections 1128(a)(1) and (3) of the Act.

2. Exclusion for a minimum period of five years is mandated by the Act and extension of the period of exclusion by 20 years is not unreasonable in this case.

(a) The aggravating and mitigating factors.

The I.G. argues that there are three aggravating factors in this case which justify extending Petitioner's period of exclusion from five to 25 years:

1) The acts of which Petitioner was convicted resulted in financial loss to Medicare and a private insurer of more than $5,000. The I.G. argues that the ordered restitution of $983,227.82 is good evidence of the actual amount of loss;

2) Petitioner was sentenced to incarceration, 51 months in this case;

3) Petitioner's fraudulent acts occurred over a period in excess of a year.

I.G. Brief at 11-12. These aggravating factors are recognized under the regulations and may be considered in determining the reasonableness of the period of exclusion proposed by the I.G. 42 C.F.R. § 1001.102(b)(1), (2), and (5). Other than to argue he was not guilty of an offense, Petitioner does not deny that the three aggravating factors identified by the I.G. are present in this case. The restitution amount of $983,227.82 (I.G. Ex. 3, at 5, 6) is good evidence that the total loss to Medicare and to Blue Cross/Blue Shield of Michigan exceeded $5,000. There is also no dispute that Petitioner was found guilty of acts that occurred over a period of more than a year and that he was sentenced to 51 months incarceration.

Because there are aggravating factors present in this case that the I.G. cites as cause to increase the period of exclusion, any mitigating factors authorized by 42 C.F.R. § 1001.102(c) may be considered. Petitioner was convicted of felony offenses with losses in excess of $5,000, not misdemeanors with losses of less than $1,500, thus, the mitigating factor recognized by 1001.102(c)(1) has no application. There is no evidence in this case that the judge in Petitioner's criminal case considered Petitioner less culpable due to a mental, emotional, or physical condition. Thus, the mitigating factor recognized by 42 C.F.R. § 1001.102(c)(2) has no application in this case. Finally, Petitioner does not allege, and there is no evidence to show, that he cooperated with investigators within the meaning of 42 C.F.R. § 1001.102(c)(3), and that mitigating factor thus has no application.

(b) Reasonable period of exclusion.

The DAB has made clear that the role of the ALJ in cases such as this is to conduct a "de novo" review as to the facts related to the basis for the exclusion and the facts related to the existence of aggravating and mitigating factors identified at 42 C.F.R. § 1001.102. See Joann Fletcher Cash, DAB No. 1725, at 19-20 n.9 (2000), and cases cited therein. ⁽²⁾ The regulation specifies that I must determine whether the length of exclusion imposed is "unreasonable" (42 C.F.R. § 1001.2007(a)(1)). The DAB has explained that in determining whether a period of exclusion is "unreasonable," I am to consider whether such period falls "within a reasonable range." Joann Fletcher Cash, DAB No. 1725, at 19-20 n.9. The DAB cautions that whether I think the period of exclusion too long or too short is not the issue. I am not to substitute my judgment for that of the I.G. and may only change the period of exclusion in limited circumstances. In John (Juan) Urquijo, DAB No. 1735 (2000), the DAB made clear that if the I.G. considers an aggravating factor to extend the period of exclusion and that factor is not later shown to exist on appeal, or if the I.G. fails to consider a mitigating factor that is shown to exist, then the ALJ may make a decision as to the appropriate extension of the period of exclusion beyond the minimum. In Gary Alan Katz, R.Ph., DAB No. 1842 (2002), the DAB suggests that when it is found that an aggravating factor considered by the I.G. is not proved before the ALJ, then some downward adjustment of the period of exclusion should be expected absent some circumstances that indicate no such adjustment is appropriate. The Katz panel did not elaborate upon the weight to be given individual aggravating factors, or how my de novo review and assessment of the weight to be given to proven aggravating factors is related to the weight the I.G. assigned those same factors.

Pursuant to the Act and the regulations, where there is a basis for a mandatory exclusion under section 1128(a) of the Act, there is an automatic exclusion for a minimum period of five years. Act, section 1128(c)(3)(B); 42 C.F.R. § 1001.102(a). Pursuant to 42 C.F.R. § 1001.102(d), one prior conviction for conduct that would cause mandatory exclusion under section 1128(a) of the Act increases the minimum period of exclusion to ten years and two prior convictions automatically cause permanent exclusion. The five-year and ten-year minimum periods of exclusion may only be extended if one or more of the aggravating factors specified at 42 C.F.R. § 1001.102(b) are present. The regulations do not limit the additional period of exclusion that may be imposed based upon the presence of aggravating factors. The regulations also do not specify how much of an extension is warranted by the existence of an aggravating factor. The DAB has indicated that it is not the number of aggravating factors that is determinative, rather, it is the quality of the circumstances, whether aggravating or mitigating, which is controlling in analyzing these factors. See Barry D. Garfinkel, M.D., DAB No. 1572 (1996).

In this case, I have found that there is a basis for mandatory exclusion pursuant to section 1128(a). The minimum period of Petitioner's exclusion is, thus, five years. I also find that extending the period of exclusion by 20 years, for a total of 25 years, is not unreasonable given the presence of the three aggravating factors already discussed and the absence of any mitigating factors.

IV. CONCLUSION

For the foregoing reasons, Petitioner is excluded from participation in Medicare, Medicaid and all federal health care programs for a period of 25 years, effective October 20, 2003.

KEITH W. SICKENDICK

Administrative Law Judge

1. I construe the motion for summary affirmance to be a motion for summary judgment, as there has been no waiver of oral hearing and the regulations recognize no action for a disposition on the merits other than decision after oral hearing, decision on pleadings after waiver of oral hearing, or summary judgment. See 42 C.F.R. §§ 1005.2, 1005.3, 1005.4, 1005.6(b)(5).

2. The DAB internet site has modified this decision to reflect n.9 of the Cash decision as n.6. See (www.hhs.gov/dab/decisions/dab1725.html). However, the footnote is reflected as n.9 in West Law� as well as in the original decision.